Domestic can manufacturers face quality restrictions amid pandemic woes

With govt looking to impose quality control orders on imported can components, manufacturers may have to shut shop as costs will hit the roof amid supply shortage

With local producers jacking up tinplate prices amid a likely dearth of imported raw material, the domestic can manufacturing industry is poised for a tough business scenario despite being a key part of essential services in the ongoing pandemic.

“With government looking to impose quality control orders (QCO) on imported can components from April, manufacturers will have no option but shut shop as costs will hit the roof amid supply shortage,” Sanjay Bhatia, president of Metal Containers Manufacturers Association told Business Standard.

The domestic can industry has been playing a crucial role in the ongoing pandemic, being part of the essential services supply chain, finding wide application in packaging of sanitisers, disinfectants, food, pharmaceuticals and edible oils among others.

Meanwhile, citing the likely shortage in coming months, local producers of tinplate which supply the majority of about 400,000-500,000 tonnes to the domestic market have raised prices by 20 percent compared to imported material.

Tata Tinplate and JSW Steel’s Vallabh Tinplate are among the organized and largest tinplate producers in the country.

Currently, the Rs 7-7.5 trillion domestic can making industry leans on imports for the balance 250,000-tonne requirement.

The industry, largely made up of MSMEs, relies on import of parts like easy-open ends, peel offs, cones and domes for Aerosol Cans. Supply of such components is being restricted due to conditions imposed in QCO, which are impractical, said industry experts.

“Due to COVID, there are travel restrictions and hence government officials cannot visit countries (from where India is importing material) to review plants for quality checks. Since approvals are not in place so far, once barriers imposed from next month, there will be no material in the country,” explained Bhatia.

Meanwhile, the association has recommended to the Ministry of Steel to withdraw QCO, alternatively to extend till March 2022, allow equivalent ISO approved material, remove steel products from the scope and ensure supply of tinplate/ tin free steel, essential inputs to can making industry so that industry can survive.